How to Pay Employees for Great Ideas

Companies can encourage innovation by tweaking how they pay employees.

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Most companies say they want employees to be more innovative, to the point that it’s become a nearly meaningless buzzword. But can you actually pay people to innovate?

Yes–depending on how you pay them, according to a pair of Canadian researchers.

In a review of seven years of corporate survey data, the researchers found that individual performance bonuses and salary did not spur a rise in new ideas and products. However, group or team bonuses, profit-sharing plans and indirect pay, such as robust employee benefits, did relate to higher creativity and better problem-solving at work.